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Carriage and Insurance Paid to (CIP) is an Incoterm where the seller is responsible for both the transportation costs and insurance coverage for goods being shipped to a designated destination, ensuring that the buyer's goods are protected during transit.
CIP means that the seller covers the cost of carriage and insurance for the goods until they reach the specified destination. The seller arranges the transportation and provides insurance coverage for the goods while they are in transit. However, the risk is transferred to the buyer once the goods are delivered to the carrier at the agreed point.
Carriage and Insurance Paid to (CIP) works by placing the responsibility for both transportation and insurance on the seller until the goods are handed over to the carrier.
For your business, this can reduce your logistical burden and financial risks. The seller arranges the transportation and provides insurance, ensuring your goods are protected. It simplifies the purchasing process, as the buyer is less concerned about these aspects, ultimately enabling faster transactions and smoother international shipping.
Buske Logistics is a Top 40 3PL with over 35 warehouses across North America, specializing in warehousing, transportation, and value-added services. We provide tailored logistics solutions serving major Fortune 500 companies.
CIP is important because it provides a clear understanding of cost responsibilities between the buyer and seller. It ensures that the seller not only pays for the transportation but also secures insurance, offering extra protection during the delivery process.
This term also helps to reduce the buyer's financial risks, as the seller covers essential costs and insurance until the goods are in transit. The buyer benefits from added security with the knowledge that their goods are insured until they are handed over to the carrier.
